International news

China downplays military growth, cuts spending

LOS ANGELES (MarketWatch) -- China said Thursday it would slow the increase in its military spending, according to reports, with the announcement coming amid mixed statements by senior army officials.

Chinese parliamentary spokesman Li Zhaoxing was cited in reports as saying the country's 2010 would increase military spending by just 7.5%, marking the first time in since the 1980s that the defense budget has grown by single digits.

"China is committed to peaceful development and a military posture that is defensive in nature,'' Li was quoted as saying by the Associated Press.

Li remarks, which came one day before the start of the annual National People's Congress, drew skepticism.

Various news reports quoted analysts as saying that the government doesn't disclose actual military spending, and that the figures are only for foreign consumption.

"All the evidence suggests that they are on a very powerful trajectory of expansion in substantive terms, and they seem to use this figure for political purposes almost, to send signals," Reuters quoted Australian National University defense expert Ron Huisken as saying.

Mixed messages

The announcement followed an article earlier in the day in the state-run China Daily, citing Maj. Gen. Luo Yuan as saying that China has no intention of challenging the U.S. militarily.

"We need to think more on how to preserve national integrity. We have no intention of challenging the U.S.," said Luo, who is also a member of the influential Chinese People's Political Consultative Conference.

However, Luo added that "China is the only permanent member of the U.N. Security Council that has not achieved territorial integrity," in an apparent reference to Taiwan, which China regards as a renegade province.

The same article, however, also quoted another officer, Colonel Dai Xu, as predicting war, probably with the U.S. or its allies.

"I'm very pessimistic about the future," Xu was quoted as writing in a recent book. "I believe that China cannot escape the calamity of war, and this calamity may come in the not-too-distant future, at most in 10 to 20 years." Read full China Daily story.

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